Banking Energy News

Commodity trade finance blockchain komgo acquires TRAFEC

north sea oil

Earlier this week, blockchain firm komgo announced it bought another commodity trade finance platform, TRAFEC. The acquired company has almost 100 corporates on the platform and was founded in 2011 by Swiss association STSA and banks. Terms were not disclosed, but we also have a revealing update on komgo’s funding.

Just over a year ago, komgo went live targeting the oil sector, and as of last September had processed around $800 million in transactions on the platform powered by Quorum. The solution is integrated with the oil post-trade blockchain VAKT.

Several of the banks are common to both the komgo and TRAFEC platforms such as ABN Amro, BNP Paribas, Crédit Agricole, ING, Natixis and Société Générale. Other Swiss banks not currently on komgo include BCGE and commodities trade finance specialist BCP.

The TRAFEC platform provides a secure communication channel between commodity traders and banks. It deals with numerous documents, including Documentary Credits and LOI’s (Letters of Intent for crude oil deals).

The announcement described komgo/TRAFEC as a merged platform and stated it will be business as usual for TRAFEC customers.

“A larger user base amounts to a stronger product offering, and this acquisition will help us to quickly scale up our network of users in key geographical markets. We are also excited by the unique functionalities enabled by the new joint offering, which will answer to the needs of a wide-range of industry users,” said Souleima Baddi, komgo’s CEO.

For market reach, the acquisition will bring two things to komgo. Firstly several more energy traders, although it already has most of the biggest. Mercuria, Koch and Gunvor are komgo shareholder traders. We believe Trafigura is also a komgo client.

But TRAFEC has several commodity traders outside of oil, and komgo’s original plan was to expand beyond energy. Perhaps the reference to “wide-range of industry users” is a nod to expansion into other commodities.

komgo technology partner ConsenSys is also now the technology partner to the agribusiness platform Covantis, which counts the world’s biggest agri commodity traders as menbers.

Funding update

After raising CHF 15 million ($15.4m) from the original 15 shareholders in 2018, we understand that komgo is currently involved in a round of funding.

However, the corporate registry shows new shares issued last September. We’ve reached out to komgo for clarification but didn’t get a response in time for publication.

CHF 1 million in shares were issued and paid by setting off against a CHF 2.5 million invoice. This could either be an invoice from a supplier, for an acquisition such as TRAFEC, or something else.

Late last year, there was an additional CHF 7.87 million shares issued, although the amount paid for the shares may be higher. The total share capital is currently 23.87m shares of one swiss franc ($1.04).

komgo original shareholders: ABN Amro, BNP Paribas, Citi, Crédit Agricole, ING, Macquarie, MUFG, Natixis, Rabobank, Société Générale, SGS, Gunvor, Koch, Mercuria and Shell.


Image Copyright: Anupong Nantha